Amgen’s Forward Multiple Looks Cheap Until You Price The Margins It Assumes

Amgen (AMGN) trades at about $393 a share. On the last twelve months of adjusted earnings, that is a trailing multiple of about 23.3 times. With Prolia and XGEVA sales falling to biosimilar rivals, the multiple looks full. What the forecast underneath it asks for is a wider margin while the company funds MariTide.

Amgen Is Losing A Franchise And Still Growing Through It

Prolia and XGEVA together delivered $1.1 billion in the second quarter of 2026, down 33% year over year, in line with what management expected once biosimilar competitors launched. The rest of the shelf is covering that decline. The six medicines management calls its key growth drivers grew 26% in aggregate year over year and accounted for nearly 70% of second-quarter product sales.

Those trailing earnings are adjusted earnings: normalized net income with stock-based compensation added back, a basis meant to sit closer to the one analysts use, though the two adjusted measures are not defined identically, so the trailing and forward multiples are not a like-for-like series. Those earnings are also a rear-view measure. Repatha alone grew 37% year over year in the second quarter of 2026.

But The Same Price Buys More On What Analysts Expect

On what analysts expect Amgen to earn in fiscal 2026, today's price is about 17.0 times earnings. On the 2027 forecast, the same price is about 16.1 times.

Consensus is a forecast, and the range behind this one still leaves the direction unsettled. Nineteen analysts contribute to the fiscal 2027 number, and their estimates run from $22.60 to $25.65 a share. The bottom of that range sits below the roughly $23.08 the same consensus expects for fiscal 2026.

Management's own guide for fiscal 2026 runs from $22.30 to $23.50 in adjusted earnings per share, and it was raised in August. Consensus sits in the upper half of that band.

So You Are Betting On Margins While Amgen Funds MariTide

Start with the easy half. Consensus has revenue growing about 3.8% a year through 2027, off a trailing-twelve-month base of $38.1 billion. Amgen grew revenue 9.1% over those same twelve months.

The hard half is margin. Consensus has earnings growing faster than revenue between the 2026 and 2027 consensus years, which is the market assuming profit margins keep expanding. Management's plan for the rest of 2026 is to spend, though it says that spending sits alongside maintaining strong operating margins.

Non-GAAP research spending is set to grow high single-digits for full-year 2026, carrying nine ongoing global Phase III trials for MariTide, Amgen's lead obesity asset. Management has warned of a meaningful sequential increase in operating expenses in fiscal Q3 2026. Capital spending in fiscal Q2 2026 went into manufacturing sites in North Carolina, Ohio and Puerto Rico, and management says the full-year budget is scaling capacity for a medicine still in Phase III.

Management has guided full-year 2026 non-GAAP operating margin, as a percentage of product sales, to roughly 45% to 46%. So what the forward multiple really prices is profitability, at a time when Amgen is spending to earn it. Our own screen ranks the stocks priced furthest below what they are expected to earn, a place to start.

Would You Have Checked Amgen's Forward Number Yourself?

Probably not. Nothing on a quote screen tells you the trailing figure sits on a shrinking franchise, and that is true of thousands of tickers.

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